The Mosaic Company (MOS) Reports In-Line Q1 EPS, Offers Guidance

The Mosaic Company (NYSE: MOS) reported Q1 EPS of $0.14, in-line with the analyst estimate of $0.14. Revenue for the quarter came in at $1.7 billion versus the consensus estimate of $1.56 billion.

Financial Guidance

"While the outlook for the first half of 2016 is muted, we see stronger markets and anticipate better results in the second half," O'Rourke said. "We expect improved profitability to be driven by lower raw material costs, combined with an acceleration in shipment volumes in both phosphate and potash driving up operating rates and margins. We believe our efforts to lower costs and reduce capital spending will further enhance our profitability and cash flow."

Total sales volumes for the Phosphates segment are expected to range from 2.3 to 2.6 million tonnes for the second quarter of 2016, compared to 2.8 million tonnes last year. Mosaic's realized DAP price, FOB plant, is estimated to range from $335 to $355 per tonne for the second quarter of 2016. The segment gross margin rate in the second quarter is estimated to be around 10 percent, and the operating rate is expected to be approximately 80 percent.

Total sales volumes for the Potash segment are expected to range from 1.9 to 2.2 million tonnes for the second quarter of 2016, compared to 2.3 million tonnes last year. Mosaic's realized MOP price, FOB plant, is estimated to range from $180 to $200 per tonne. Mosaic's gross margin rate in the segment is expected to be in the mid-to-high teens, excluding CRT. The operating rate is expected to around 70 percent.

Total sales volumes for the International Distribution segment are expected to range from 1.4 to 1.6 million tonnes for the second quarter of 2016, compared to 1.5 million tonnes last year. The segment gross margin is estimated to be in the low single dollar per tonne range.

For calendar year 2016, Mosaic lowered its guidance as follows:

• SG&A expense range to $340 to $360 million, down from $350 to $370 million.
• Capital expenditures range to $800 to $900 million, down from $0.9 to $1.1 billion. Expectations for equity investments in the Ma'aden Wa'ad Al Shamal Phosphate Company are $220 million, down from the $300 million previously expected.
• Phosphates sales volumes range to 9 to 9.75 million tonnes, down from a range of 9 to 10 million tonnes.
• Potash sales volumes range to 7.5 to 8.0 million tonnes, down from a range of 7.5 to 8.5 million tonnes.

All other full year 2016 guidance remains unchanged:

• Canadian resource taxes are expected to range from 21 to 25 percent of Potash gross margin excluding CRT.
• Brine management costs to range from $160 to $180 million.
• The effective tax rate to be in the upper teens.
• International Distribution sales volumes in the range of 6 to 7 million tonnes.

For earnings history and earnings-related data on The Mosaic Company (MOS) click here.

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